key insights
Institutional investors’ large holdings in Intel mean that they have a large influence on the company’s stock price.
The top 25 shareholders own 43% of the company
Recent purchases by insiders
A look at the shareholders of Intel Corporation (NASDAQ:INTC) can tell us which group is the most powerful. Institutional investors hold the largest stake in the company, with an ownership of 65%. In other words, this group faces the greatest upside potential (or downside risk).
Therefore, after the company’s market capitalization fell to USD 97 billion last week after its stock price fell by 5.5%, the most affected group was institutional investors. Needless to say, the recent losses, which add on to the one-year losses of 37% of shareholders, may not look good, especially for this category of shareholders. Institutional investors, often referred to as “market movers,” have a significant influence on stock price movements. As a result, if the decline continues, institutional investors could be pressured to sell Intel, hurting retail investors.
The chart below zooms in on the different ownership groups of Intel.
Check out our latest analysis for Intel.
Ownership breakdown
What does institutional ownership tell us about Intel?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they usually consider buying larger companies that are included in the relevant benchmark index.
Intel already has a share registry. In fact, they own a significant stake in the company. This suggests some credibility among professional investors. But we can’t rely on that fact alone because institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. If such a trade goes wrong, multiple parties may compete to sell stock quickly. This risk is higher for companies without a history of growth. You can see Intel’s historic earnings and revenue below, but keep in mind there’s always more to the story.
Profit and revenue growth
Institutional investors own over 50% of a company, so when they come together they can strongly influence board decisions. Intel is not owned by hedge funds. Vanguard Group is currently the company’s largest shareholder with 9.2% of outstanding shares. By comparison, the second and third largest shareholders hold about 8.5% and 4.5% of the stock, respectively.
Our research shows that the top 25 shareholders collectively control less than half of the company’s shares. This means that the company’s shares are widely distributed and there is no dominant shareholder.
the story continues
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a significant number of analysts covering this stock, so it might be useful to know their aggregate forecast for the future.
Intel Insider Ownership
The definition of a company insider can be subjective and varies by jurisdiction. Our data reflects individual insiders, and at least captures board members. Management ultimately answers to the board. However, it is not uncommon for managers to be members of the board of directors. Especially if the manager is the founder or CEO.
Insider ownership is positive when it signals leaders are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative depending on the situation.
Our latest data shows that insiders own less than 1% of Intel Corporation shares. It’s quite large, so we wouldn’t expect insiders to own a large percentage of the shares. In total, they own US$53m worth of shares. Perhaps it’s important to consider recent buys and sells as well. You can click here to see if insiders have been buying or selling.
Open to the public
The general public, including retail investors, own 34% of the company’s shares, so they can’t be easily ignored. Although this size of ownership is significant, it may not be enough to change company policy if the decision is not aligned with other large shareholders.
Next steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 3 warning signs we’ve spotted with Intel.
If you’re like me, you might want to consider whether this company will grow or shrink. Luckily you can check this free report showing analyst forecasts for its future.
Note: The numbers in this article are calculated using data from the previous 12 months and refer to the 12-month period ending on the last day of the month in which the financial statements are dated. This may not match the full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
